Portugal begins PPP overhaul
7 August 2012
Portugal’s government has renegotiated its first PPP contract, paving the way for a reduced payment framework across 30 deals.
State-owned roads firm Estradas de Portugal renegotiated the concession for the Pinhal Interior highway in central Portugal last week, generating savings worth €500m over the life of the project.
Prime Minister Pedro Passos Coelho has said he wants to cut Portugal's future PPP obligations by 30% in the next 30 years. Total future PPP costs for the state have been estimated at €26bn, but the government is obligated to enact structural reforms mandated under the €78bn bailout from the European Union and International Monetary Fund.
Many experts have said the government used over-optimistic projections for traffic volumes and profitability when PPPs such as the €1.2bn Pinhal project were first signed.
